Loyalty/Source of Sales
SOS/Owner Loyalty/Repurchase Loyalty
This is one of the trickier areas of analysis. The very same questions are used to determine SOS, Owner Loyalty and Repurchase Loyalty. This page will explain the terms, give examples of their use, and include Maritz information.
Definition
SOS - Using a combination of vehicle disposal and household vehicle inventory data, Source of Sales answers the questions, "Where did the business come from? What models did my recently acquired customers dispose or own?"
Owner Loyalty - Again, using disposal and household inventory data, Owner Loyalty answers the questions, "Where did the business go? What did my former customers purchase when they re-entered the market?
Repurchase Loyalty - A refinement of Owner Loyalty, Repurchase Loyalty restricts loyalty calculations to a study of former customers who disposed of a vehicle that they originally purchased new. It answers the question, "Where did the business go?" but is focused on a more traditional view of a manufacturer's customer base.
Vehicle Disposed At Time Of Purchase - The simple answer to the question, "What did my customers dispose of when they bought their new vehicle?"
SOS - Source of Sales
Source of Sales answers the question, "Where did the business come from?" In other words, what model did my recently acquired customers dispose of - or if no vehicle was disposed, what vehicle did they own - when they purchased their new vehicle?
The table is based (percentaged) by the vehicle purchased, and displays the incidence of buyers who disposed/traded any of 200 different models as a result of purchasing their new vehicle. If no vehicle was disposed at the time of purchase, the first vehicle listed as an "other vehicle in the household" is substituted. In addition to this information, the table also displays the frequency of customers who did not own a vehicle. For any model purchased, the sum of Vehicles disposed/traded (or owned,if no vehicle was disposed) and Did not own a vehicle equals 100%.
%Calculation: (Previous Vehicle Owned*) ÷ (Total Buyers of a model)
- *Vehicle disposed or inventory vehicle if no vehicle was disposed
Interpret:
"30.56% of 1995 Honda sales came from households which either disposed of a Honda at the time of purchase, or did not dispose of a vehicle but had a Honda in the household.
32.84% of 1995 Honda sales were sourced from households which disposed of a Honda or Acura vehicle, while 46.95% (100% -30.56% -2.28% -20.21%) of Honda Sales were sourced from the competition (i.e. "conquest sales"). 20.21% of Civic sales came from households which did not own a vehicle."
| Corp/Div Purchased | ||||
| Honda | Acura | Mazda | Mitsubishi | |
| Source of Sales/Owner Loyalty | ||||
| Honda | 30.56% | 11.46% | 6.14% | 6.01% |
| Acura | 2.28% | 18.76% | 0.77% | 0.52% |
| Mazda | 2.71% | 4.85% | 19.04% | 3.64% |
| Mitsubishi | 0.44% | 1.5% | 0.81% | 10.85% |
| Nissan | 5.43% | 5.63% | 5.07% | 5.8% |
| Infiniti | 0.06% | 0.16% | 0.18% | 0.13% |
| Toyota | 7.36% | 7.52% | 5.34% | 5.18% |
| Lexus | 0.38% | 0.35% | 0.23% | 0.18% |
| Special Codes | 20.21% | 19.3% | 23.15% | 23.9% |
| Note: Numbers are examples, not actual values! | ||||
Owner Loyalty
Owner Loyalty answers the question, "Where did the business go?" In other words, what did my former customers do when they re-entered the market?
The table is based (percentaged) by the vehicle disposed at the time of purchase. If no vehicle was disposed at the time of purchase, then the first vehicle listed as an "other vehicle in the household" is substituted. The table displays the frequency of model purchased by the disposers - or, if no vehicle was disposed, the owners - of any of 200 different models disposed or owned. For any model disposed/owned, the sum of all "vehicles purchased" equals 100%.
% Calculation: (Total Buyers of a Model) ÷ Previous Vehicle Owned*
- *Vehicle disposed or inventory vehicle if no vehicle was disposed
Interpret:
"Of former Honda owners re-entering the market during the second quarter of the 1995 model year, 42.56% bought another Honda (i.e. were brand-loyal).
44.56% of former Honda owners re-entering the market bought an American Honda Motor Company product (i.e., were loyal to Honda/Acura) while 55.44% bought a competitive product (i.e., defected to competition)."
| Source of Sales/Owner Loyalty | ||||
| Honda | Acura | Mazda | Mitsubishi | |
| Corp/Div Purchased | ||||
| Honda | 42.56% | 21.77% | 10.27% | 5.07% |
| Acura | 2% | 22.42% | 2.3% | 2.17% |
| Mazda | 2.82% | 2.43% | 23.83% | 3.1% |
| Mitsubishi | 2.17% | 1.29% | 3.58% | 32.48% |
| Note: Numbers are examples, not actual values! | ||||
Repurchase Loyalty
Like Owner Loyalty, Repurchase Loyalty also answers the question, "Where did the business go?" but limits the analysis to former customers who originally bought the vehicle disposed at the time of purchase as a new vehicle. Stated differently, Repurchase Loyalty excludes any former customers who, at the time of purchase, disposed of a vehicle they had originally bought as a used vehicle.
The table is based (percentaged) on the vehicle disposed at the time of purchase. For any qualifying model disposed, the sum of all "vehicles purchased" percentages equals 100%.
% Calculation: (Total Buyers of a Model) ÷ Previous Vehicle Owned*
- *Vehicle disposed, which at the time of purchase was new.
Interpret:
Of former Civic owners 1) re-entering the market during the study period, and 2) disposing of a Civic originally purchased new, 48.44% bought another Civic. (i.e., were model-loyal).
49.47% of former Civic owners re-entering the market bought an American Honda Motor Company product (i.e., were loyal to Honda/Acura), while 50.53% bought a competitive product (i.e., defected to competition.)"
| Repurchase Loyalty | ||||
| Accord | Civic | CRX | Prelude | |
| Corp/Div Purchased | ||||
| Honda | 48.88% | 48.88% | 38.94% | 27.28% |
| Acura | 1.9% | 2.03% | 4.26% | 4.13% |
| Mazda | 2.33% | 1.01% | 6.51% | 1.04% |
| Mitsubishi | 1.36% | 2.47% | 7.35% | 8.4% |
Vehicle Disposed At Time Of Purchase
Vehicle Disposed At Time Of Purchase answers the question,"Where did the customers dispose of or trade-in when they purchased their vehicle?" Presented in the syndicated report as a frequency distribution,the table combines the complete answer distributions from the questions,"Did you trade-in or otherwise dispose of a vehicle as a result of purchasing your new car (truck)," and, "What was the make and model of the vehicle you disposed of or traded-in?"
The table is based (percentaged) by the model purchased, and displays the incidence of disposing/trading-in any of 200 different vehicles as a result of purchasing the new vehicle. In addition to disposal information, the table also displays the frequency of customers who did not dispose of a vehicle or did not own a vehicle. For any model purchased, the sum of 1) Vehicles disposed/traded, 2) Did not dispose of a vehicle, and 3) Did not own a vehicle equals 100%.
% Calculation: (Vehicle Disposed*) ÷ (Total Buyers of a Model)
- *Vehicle disposed or inventory vehicle if no vehicle was disposed
Interpret:
"30.56% of 1995 Honda buyers traded-in or otherwise disposed of another Honda at the time of purchase.
32.84% of 1995 Honda buyers disposed of an American Honda Motor Company vehicle as a result of buying their new Honda. 46.95% of Civic buyers disposed of a competitive product, while 20.21% did not own or did not dispose of a vehicle when they bought their new car."
| Corp/Div Purchased | ||||
| Honda | Acura | Mazda | Mitsubishi | |
| Disposed: Corp/Div | ||||
| Honda | 30.56% | 11.49% | 6.14% | 6.01% |
| Acura | 2.28% | 18.76% | 0.77% | 0.52% |
| Mazda | 2.71% | 4.85% | 19.04% | 3.64% |
| Mitsubishi | 0.44% | 1.5% | 0.81% | 10.85% |
| Special Codes | 20.21% | 19.3% | 23.15% | 23.9% |
The terms and definitions on this page are ©1996 Maritz Marketing Research Inc., All rights reserved.
Calculating Industry Loyalty
NOTE: There are various methods for calculating loyalty, please understand your 'corporate' definition prior to attempting any form of loyalty analysis.
In general, loyalty analysis is performed with new vehicle buyer studies by examining the percentage of new buyers that had formally disposed of the same vehicle, brand, segment, etc. Moreover, the definition of 'disposed' is often qualified in some way, for example, to consider only the disposed vehicles that had been previously purchased new.
The most typical way of running a loyalty analysis within mTAB would be to select the question representing disposal as columns and the question measure representing new purchase as rows. The column percentages then represent the percentage loyalty. If the same vehicle (brand, segment, etc.) list is used for both the column and the row questions, the diagonal of the tab (i.e. where the column and row are the same response label) represents the loyalty percentage.
When performing this analysis, it is easy enough to compare any given column's loyalty measure to other columns. However, the question often arises,how do all columns compare against the loyalty measure across ALL columns. When all columns represent the entire industry, then the missing measure is the 'industry loyalty percentage'. Unfortunately, this measure can not be directly determined with a single mTAB tab run. However, it is easy enough to perform,the required steps are outlined below.
Step 1: Select the column and row questions that you will be using to determine loyalty. Format the row question as Weighted Counts rather than column percentages.
Step 2: Run the tab and export to a spreadsheet. Sum up the Subset Total count for each column in the tab. Sum up the intersection value, where the row and column labels are the same, for each column of the tab. Divide the sum of the intersections by the sum of the column subset totals.
Here is a link to a spreadsheet example that illustrates this process. Please feel free to download and review the spreadsheet example and let us know if you have any further questions. File:ExampleOfIndustryLoyalty.xls
